Steward Partners Recapitalizes, Gets $50 Million from Cynosure

March 22, 2019 – Steward Partners Recapitalizes, Gets $50 Million from Private Equity Firm

by Mason Braswell

Steward Partners, a Washington D.C.-based independent firm founded in 2013, has recapitalized with a $50 million investment from The Cynosure Group, according to Jim Gold, Steward’s chief executive.

The Salt Lake City-based private equity firm closed its investment on Wednesday, giving it a minority stake in Steward and two representatives on the independent brokerage firm’s board, said Gold.

“We wanted to fortify the balance sheet,” he said. “Another part of it was thinking about the opportunity to have this be a liquidity event for the partners that qualify, and are eligible.”

Details of monetizing existing partnership stakes are being worked out, but some of the firm’s 108 brokers and its managers will be able to participate, he said. Tony Sirianni, the publisher of AdvisorHub, was a founding partner of Steward Partners and has an equity stake in the firm.

Steward, whose brokers manage $11.1 billion of customer assets from 18 offices, primarily on the East Coast, will use some of the new money for recruiting, Gold said. The deal will not affect management or the firm’s relationship with Raymond James Financial Services, its broker-dealer. Steward also operates an RIA, Steward Partners Investment Advisory.

Cynosure, which was founded as a family office for the Eccles family of Utah-based industrialists and bankers, was introduced to Steward through Charles “Charlie” Johnston, a former chief executive of Smith Barney, who joined Steward’s board in August. Johnston is a longtime friend of Keith Taylor, a Cynosure managing director and former Carlyle Group partner who will be joining the Steward board, according to Taylor.

Cynosure’s website describes itself as “an independent alternative asset manager that makes long-term, collaborative investments on behalf of high net worth families, endowments, foundations and other like-minded institutions.”

The Steward investment is the fourth, and largest, that Cynosure has made in wealth management firms, he said. It also owns minority stakes in Illinois-based Savant Capital,  a fee-only registered investment advisory firm with $5.6 billion in assets, and Texas-based Avalon Advisors, an RIA with $6.6 billion of assets under management. It also has an indirect investment in BrightPlan a digital financial planning firm.

Cynosure was attracted by Steward’s ability to manage its rapid growth, Taylor said, saying that he expects the firm to continue to attract breakaway brokers from large firms while adding smaller independent registered investment advisory firms looking to become more efficient through scale.

“Those are going to continue, and will be a big tailwind behind Steward,” he said.

 

“Note: The content reflected here is for informational purposes only and does not constitute investment advice, a recommendation, or an offer of solicitation. The reader should not assume that any investment referenced herein was or will be profitable.”